Thursday, October 27, 2016

NOTE: This was submitted to the Citizen-Times by Ken Michalove. We share it here.

Guest Editorial:Vote “NO” on the Asheville $74 Million in Bond Issues

I vote “no” on the $74,000,000 bond issues until there is appropriate spending balance and protection against 4 votes changing an entire capital spending plan at any Council meeting.

The City desperately needs infrastructure improvements. However, those needs have been supplanted by excessive funding of: affordable housing; greenways; the river arts district; and, the Asheville Art Museum, as compared to the overall needs of the City.

As an Asheville taxpayer, I am not willing to write a blank check to future office holders that I don’t know that may have the types of special interests that are currently funded disproportionately; or, in the future, the latest social need, as they see it. Are you?

Why did the Council wait more than 5 years to consider a bond issue? Interest rates have been at an all-time low for years…we are advised that interest rates will be increasing in the near future, as soon as December 2016.

Do we have the progress reports on the status of how the CIP funds have been spent in the past 5 years compared to the actual 5 year CIP approved projects? I think not.

There has been a proliferation of new City “user fees” for services…trash, storm water ……these are taxes! And, there will likely be more of those “user fees” imagined by future City Councils as they try to tell the public they are not raising taxes.

The 2013/2014 Council raised taxes 2 cents ($2 million dollars). That $2 million was to be spent in 2014, it was not spent as appropriated. However, the Council didn’t reduce that tax. Result…the City has collected in 4 years $ 8 million on a project that was not started but the tax was not lifted. The use of funds can be hidden, there are no watch dogs to bring these matters to the attention of the public.

Do you realize that with the adoption of the current City Budget the City Council has $131,223,086 million (a combination of the 5 - year Capital Improvement Program, “CIP”, and the Fund Balance) to spend on capital and other projects which they can change at any given meeting with 4 votes; and, they have done so in the past! Now the Council wants us to vote for an additional $74,000,000 million making it a total of $205,223,086 million that can be changed at any given meeting with 4 votes.

One of my fears is that the Manager and Council have under estimated their commitments and future pressure by special interests for Affordable Housing; the River Arts District and Greenways; and, with the passage of a $74 million bond issue, more CIP money will be disproportionately available for those types of projects.

Wednesday, October 26, 2016

(Second in a series of articles examining the proposed city bonds up for approval in the general election)

The City of Asheville, which prides itself on fostering diversity, may have gotten an unexpected dose of it in promoting its “affordable housing” bond.

Both Cecil Bothwell, who is possibly the most vocally progressive member of Asheville City Council, and leaders of Asheville’s black community have now gone on record opposing the $25 million bond, one of a trio of bonds totaling $74 million that are up for approval in the November 8 general election.

The Asheville Area Chamber of Commerce’s website illustrates its pitch for the bonds with a photograph of a mother and her two daughters smiling proudly next to the front door of a new home. The inference is clear: a vote for the $25 million bond is a vote for helping people realize the American dream.

In fact, the bond offers no clear pathway to relief of Asheville’s affordable housing crisis, in terms of either homes or rental units.

What it proposes is the setting aside of moneys to be used for two broad purposes: $10 million would go into a housing trust fund and the remaining $15 million towards “repurposing” of city-owned land for affordable housing” along South Charlotte Street.

The housing trust fund could be tapped as loans by builders or developers, provided they promise to make a percentage of a given project “affordable” – either in terms of rent, for apartments, or price, for houses – for the duration of the loan. Once the loan is repaid, over a term of from three to 20 years, the builder will be free to set rents or prices.

Livin’ at the Taj-Ma-Garage

Among the repurposing suggestions set out for the South Charlotte Street corridor is the transformation of the city’s public works building at 161 South Charlotte into a complex of up to 400 affordable rental units. The city does not specify whether this would involve razing the existing structure or simply renovating it. The sprawling brick complex, often referred to by locals as “the Taj Ma-Garage”, was constructed in the late 1980’s.

The city would then construct an entirely new public works facility further down the street, at a projected cost of $14 to $15 million.

“Cooked up too quickly”

“I know the housing bond is well intentioned, but deeply question both the success of Asheville in boosting affordability, and a proposal that accounts for a big chunk of the housing bond,” Bothwell said in a Facebook post announcing his decision not to vote for it.

“An estimated $14-15 million to relocate seems like an enormous cost, both financially and environmentally. I think this idea was cooked up too quickly and with too little analysis. So I voted no."

“We’ve heard it all before”

“You’ve got to include taxes in the formula for what all this is going to cost,” said Black businesswoman and political activist Dee Williams. “It’s not free. It’s diametrically the opposite of affordability.

“I read the [bond] language and I voted against it. We’ve seen and heard it all before,” Williams said. “We’ll fix this and we’ll fix that. This is actually city-sponsored gentrification.”

Williams said it was “really ironic” that the South Charlotte Street corridor was once a main thoroughfare of a thriving black commercial and residential district that was bulldozed by the city in the 1980’s in the interest of urban renewal.

Saturday, October 22, 2016

“Shall, vb. Used in laws, regulations or directives to express what is mandatory”

“May, vb … have permission to … be in some degree likely to … have liberty to”

Webster’s Seventh New Collegiate Dictionary

One verb is imperative, one is conditional. And the difference is enough to have caught retired Asheville attorney Sidney Bach’s attention when he read the public notice of the November 8 bond referendum, and then read the wording of the bond question on the actual ballot.

City Published Notice

The law (in this case NCGS 159-61) requires that matters to be voted on by public referendum must be published, in print, in advance of the vote. Hence, the city’s orders for the proposed issue of each of three general obligation bonds, to be voted on November 8, appeared in the Asheville Citizen-Times on October 10.

The order for each bond, as published, concludes:

“A tax sufficient to pay the principal of and interest on said bondsshall be annually levied and collected.”

Voting Ballot Question

But on the official ballot itself, each bond question, which begins, “Shall the order authorizing [followed by a description of the bond’s purposes], and concludes,

“providing that additional taxesmay be levied in an amount sufficient to paythe principal of and interest on the bonds, be approved?”

“Shall be annually levied and collected” on the previously published notice. “May be levied” on the ballot voters will actually fill out.

The difference in wording was significant enough to send Bach to his own attorney, Albert Sneed, who in turn fired off a letter to Buncombe County Board of Elections Director Trena Parker.

On October 13, a week before early voting was due to start, Sneed wrote to Parker, “The form of the question on the ballot should reflect the mandatory nature of the bond order and notice published by the city, but it merely states that ‘additional taxes may be levied … My client [Bach] wants to call this to your attention in time for the ballot to be changed, as we believe it is a defect in the way the question is framed.”

According to Bach, the Board of Elections responded that they had consulted with Parker, Poe, Adams & Bernstein, the city’s outside bond lawyers. “They said Parker, Poe had framed questions this way dozens of times, with no problems,” he said.

“The reason I’m harping on this,” Bach said, “is that it detracts from getting a meaningful vote. The wording of a bond question that’s to be voted on has to be as precise as possible. When you have a verb that in effect changes the whole meaning of the question, that’s an important word.”

While there has been extensive discussion about exactly how many additional dollars the adoption of the bonds would add to city tax bills, it has been unilaterally accepted that some tax increase will result.

But Bach maintains that a wobbly statement of the bond question could lead some voters to shrug and vote in favor of the bonds, thinking that additional taxation “might or might not happen.”

“When’s the last time you read a legal notice?” Bach asked. “But people are going to have that ballot in their hands and they will read it. “And some of them are going to say, ‘Well, they may raise taxes and they may not. Let’s roll the dice.’ And they’ll vote yes.”

I’m not saying there’s been deliberate, premeditated misrepresentation” as part of a pro-bond strategy, Bach said, “or even a tendency to want to soften the language a little. But the question is one of competence.

“If they’re not competent enough to make their public notice and their ballot question agree, do we want to trust them with $74 million?” he asked.

Monday, October 17, 2016

This is the first of a series of articles examining each of the city’s three proposed bonds.

The largest of the three bonds Asheville residents will be asked to approve on November 8 is theoretically devoted to transportation system improvements. But analysts say the $32 million allocated for transportation purposes consists of work the city should have been doing all along, plus a generous dollop of cash for greenways, which they say should not even be included under the transportation heading.

The city’s breakdown of proposed transportation bond financing is as follows:

Road resurfacing: $15,680,000

Sidewalk improvements: $3,500,000

New sidewalk projects: $6,320,000

Transportation safety: $1,900,000

Greenways: $4,600,000

Bus shelters $500,000

What you really get - patch job

The sidewalk improvement projects comprise eight miles of sidewalk maintenance (on 13 different roads), twelve new sidewalk linkages, and four miles of new sidewalks. What remains is to be applied to a myriad of street patching projects on which the city has fallen behind the curve.

Asheville is #1 Cityfor Pedestrian-Involved Traffic Accidents

According to the City's own bond application, Asheville has for several years been ranked as the number one city statewide in pedestrian-involved traffic accidents.

And yet, it dedicates less than 1% to public safety - $1.9 million, to be exact. Furthermore, that $1.9 million will produce a grand total of:

4 new crossing signals

4 signal pole replacements and

new speedbumps on a total of 10 miles of city streets.

But will they actually even do this? Remember, it only takes a vote of 4 to change where the money goes...

Public Transportation vs. Greenways$500,000 vs. $4.6 MILLION

As a nod to public transportation, the city has earmarked $500,000 for the construction of 20 new bus shelters. According to its own bond application, the city has not built any new bus shelters in three years. And according to a mass transit study conducted for the city in 2009, there are 25 existing bus stops (out of 87) where 25 or more persons board buses every day, adding up to 149,000 workday trips per year.

“For some reason, bus shelters are really expensive,” Mayor Esther Manheimer said during a recent bond presentation. Indeed the relatively paltry amount being devoted to bus shelters and transportation safety has led critics to wonder aloud why the city plans to devote more than double those two budget items to … Greenways.

ALMOST 5 MILLION FOR GREENWAYS

The most actively discussed of the bond allocations (among those who are aware of them) is the $4.6 million for greenways -- $3.6 million for completion of the Swannanoa River Greenway and another million for greenway connectors.

Asheville’s greenway system – a necklace of “linear parks” surrounding the city – has served as a bandwagon for city government, candidates for city office, as well as the Chamber of Commerce and other promotional entities since the approval of the Greenway Master Plan in 2009. And almost from the beginning, the greenways project has met with pushback from property owners concerned about property values and privacy encroachment, as well as from environmental groups who fear the ecological consequences of construction.

Recent extensive felling of old-growth trees at the Town Mountain and French Broad greenway sites has infuriated many citizens, while more fiscally-minded observers have criticized the city for prioritizing greenway funding ahead of desperately needed infrastructure repair and public housing.

In 2012 the city quietly pulled the greenway plans out of the Parks and Recreation Department’s jurisdiction and moved them to Transportation. Ever since, city staff has hammered home the sentiment, as city Chief Financial Officer Barbara Whitehorn publicly stated last June, that “Asheville’s philosophy is that greenways are a part of the city’s infrastructure. They actually make up part of the multimodal transportation system.”

Calling greenways multimodal transportation components has drawn fire from citizens who point out that, while all greenways feature pedestrian walkways and bicycle paths they are by definition closed to vehicular traffic, including city buses. As one observer put it, if you step out in the middle of a highway, you're likely to get hit. Step out in the middle of a greenway.... maybe you'll encounter a deer.

“We see them as critical to our infrastructure,” Whitehorn said, prompting one local wag to say Whitehorn’s comments conjured up visions of “throngs of Ashevillians happily commuting to work on foot while singing, ‘Hi-ho, hi-ho/It’s off to work we go’.”

Only slightly less fanciful, critics say, is the notion of greenways being used extensively by cyclist-commuters, although bicycles have become second only to craft beer as part of the Asheville brand.

City Manager Gary Jackson (cycling member of Velo Sports Racing; Salary - $227,831) and Councilor Gordon Smith are enthusiastic bicyclists, and Mayor Esther Manheimer saddled up to participate in the city’s “Strive Not To Drive” week last May.

The transportation bond money proposes to finance the first phase of construction of the Swannanoa River (East Asheville Greenway): a two-mile corridor running from South Tunnel Road to Azalea Park.

This begs the question - why have we put our public transportation second to tourism transportation? Tying greenways and cycling together allows the City to ramp up the importance of cycling.

According to a recent article by the John Locke Foundation, "bicycling remains a tiny, and largely insignificant, form of commuting" with usually less than 1% using it as a way of getting to work and "despite millions of dollars spent on infrastructure, bicycling in North Carolina has barely grown at all over the last decade." (Source: John Locke Foundation, "Spotlight 478: The Cost of Bike Lanes")

Therefore, if the City can save 149,000 work trips for bus commuters and has known that since 2009, why hasn't it done it and if these bonds pass, will they do it?

Sunday, October 16, 2016

With slightly more than a month to go before it’s voted on, the city’s proposal to issue $74 million worth of general obligation bonds is finally running into organized opposition.

Mountain Area Citizens’ Political Action Committee (MACPAC) has erected a webpage titled “Protect Our Future,” which contains an e-letter that can be signed and sent, petition-like, to Asheville City Council.

As a concerned taxpayer and citizen of the City of Asheville, I respectfully request that you withdraw your current bond proposal. Our city already has a substantial amount of debt and is not in good financial standing. Adding such an overwhelming amount of debt to this current total is not only worrisome but irresponsible to our future generations.

I ask that you not indenture the children, the future of our great city, into further debt at this time. If these projects are of ultimate importance, we must first put our financial house in order by reducing the amount of debt presently on the books.

Thank you for doing the right thing not just for today, but for our tomorrow.

With deepest respect,

A Concerned Taxpayer.”

It all began last Spring …

The MACPAC letter drive is the first organized public effort against the issue of the three-bond package, which will carry a combined debt service of $36 million for a total indebtedness of $110 million. But grassroots opposition to the bond issue sprang up as soon as it was announced that city council was contemplating it, and has intensified since council approved a referendum on it in August.

In May an angry confrontation between Asheville Mayor Esther Manheimer and former Vice Mayor Chris Peterson during a city council meeting led to Manheimer’s having Peterson escorted from council chambers by police. Peterson had referred to the bond issue as “a Ponzi scheme” during public comment time.

A $74 million slush fund?

And in August, as council prepared to put the referendum to a vote, Asheville resident and attorney Sidney Bach said, “There can be no doubt that for the unelected staff at City Hall [the bond money] will become a $74 million slush fund to use as they please.”

Bach was voicing the anti-bond forces’ other major concern, in addition to the debt burden the bonds will create: the fact that ultimately, outside of the broad general categories for which the bonds would be issued – transportation, parks and recreation, and affordable housing -- the purposing of the bond money is open-ended. In other words, although the city has listed projects in each category that it says it would fund with bond proceeds, here is nothing to prevent it from using bond money for something else, as long the something else can be made to fall within that category.

“Take for example, the $32 million designated for Transportation,” said Mari Peterson on the news and commentary website Asheville Unreported. “The City has said they will spend at least $16 million on streets and bike lane repaving but the City could move these funds to more Greenway construction instead because ‘Greenways’ also falls under ‘Transportation.’ See how easy that was?”

City Finance Manager Barbara Whitehorn confirmed the nonspecific nature of the bond questions when she told city council in July, “The question is written in such a way that it leaves the option open for Council to add or remove particular projects.”

Cheerleaders

For its part, the city has mounted a major public relations campaign to sell the bond issue to Asheville voters. When Manheimer gave her annual State of the City address on Tuesday, brochures urging passage of the bond issue were placed on tables. In the speech itself, Manheimer called the bonds “a catalyst for equity” and couched her pro-bond pitch in terms of “diversity and opportunity,” implying that bond money could help achieve those intangibles.

The mayor will also stump for the bonds in a series of four “bond expos” to be held at various locations around the city beginning October 10.

The Asheville Chamber of Commerce endorsed the bond issue early on, and has been helping lead cheers for the pro-bond side. The Asheville Downtown Association promptly followed suit along with the United Way. Asheville’s Adult Soccer Association and Ultimate Frisbee League have also weighed in pro-bond.

What’s an “A” more or less?

The city’s website, in promoting the bonds, says the city’s general obligation bond rating is AAA; that Asheville’s per capita debt is lower than most North Carolina cites; and that “, the City will have seven years to issue the bonds and approximately 20 years to pay off the bonds after the funds are received.”

Opponents, particularly Asheville Unreported, have countered that the city’s applicable bond rating according to Standard and Poor, is in fact AA+; that the bond indebtedness will have the effect of raising the city’s per capita debt by 538% over 2015 levels and give Asheville the fifth-highest per capita debt of all North Carolina cities; and that in reality the city could take as long as 17 years to issue the bonds.

On social media, pro-bonders have reacted to this criticism with combined rage and disdain, dismissing it as “irrelevant” and “nit-picky.” Members of the left-leaning Facebook group “Asheville Politics” demanded an apology for “this absolute s**t and garbage” and intoned, “It’s embarrassing how folks agitate against their own interests and those of their neighbors to serve somebody's political vendetta.”

Other Asheville Politics members tarred bond opponents with different brushes. “Why do you hate progress and the future?” one asked. “To keep people base like animals so they’ll believe you false religion? You people are terrorists.” And another asked, “Why should we trust a PAC that claims Sandy Hook was a hoax?” , an apparent reference to the 2012 shootings at Sandy Hook Elementary School in Connecticut.

Bond critics say the germ of the entire bond idea can be found in an “inadvertent admission” by the city in the midst of its pro-bond talking points. The city says:

“The City's current capital improvement program (CIP) is at capacity; no additional projects can be added under the current model until 2023 or later. The additional revenue that could be realized from a bond referendum would allow Council to prioritize projects that are planned for 10 or more years into the future and address current and long term community needs.”

That, opponents say, is an admission by the city that, in effect, it has simply spent all its money and now wants more.

Tuesday, October 11, 2016

The auditorium at Ira B. Jones Elementary School can seat several hundred persons. But fewer than a dozen were in it Monday evening to hear Asheville Mayor Esther Manheimer make the city’s pitch for voting “yes” on the upcoming $74 million bond referendum.

That may have been a mixed blessing for Manheimer, who had to deal with some hardball questions and scathing criticism following a Powerpoint presentation that was designed to explain to the public why the city needs all that money, and why it should borrow it now.

Monday’s event was the first in a series of four such meetings to be held in various parts of town this month, leading up to voting on the bonds issue, which will be included on the November 8 general election ballot.

The mayor began with an overview of the three proposed bond purposes – transportation, affordable housing, and parks and recreation – with photos showing projects in each category that the city has completed. She then said now is an ideal time to be borrowing money because interest rates are low and the city enjoys a high credit rating, enabling it to obtain excellent interest rates. In turn the high credit rating is largely due, she said, to a low per capita debt of $274 per taxpayer, per year.

“Isn’t that a 2015 figure?” a reporter asked. “And using the city’s own figures, if we take a snapshot of the current indebtedness we see a current per capita indebtedness figure of $947, which is more than three times that. And that beginning in – “

“I have researched that sheet,” the mayor interrupted, referring to statistics compiled by Asheville Unreported based on input from the city’s own bond counsel. “It’s not totally accurate but it is true to say that once the borrowing for this year is completed [the per capita debt] debt will be somewhere around seven hundred and something. I’m not sure. It will increase.”

“So, the reporter continued, “using those same figures, the per capita debt would eventually be $1748, beginning in 2017 and going to when all the bonds are issued. That would put Asheville with fourth or fifth highest per capita debt in the state and only $103 behind Charlotte, a city ten times its size. Is my math wrong?”

“No, it’s – it is wrong, but it’s not all that far off,” the mayor said. She did not specify how wrong the $947 figure was, nor did she explain why she had initially quoted the $274 figure when she was apparently aware it was outdated.

“The relevant comparison isn’t the city’s size, compared to Charlotte” Manheimer added, “it’s the ratio of debt to the valuation of the property. Greenville, North Carolina, is almost exactly the same size as Asheville but it’s property value is about half so its [per capita debt] is higher.” She pointed out that this will probably be even more the case after the city conducts property revaluations in January.

The mayor told the audience that the city enjoys a AAA Standard & Poor’s bond rating, as is also claimed on the city’s website. She made no mention of an Asheville Unreported article, “The Strange Case of the Slipping Bond Rating,” that contained a screenshot of a State Treasurer’s Office document which showed the rating as AA+.

A reporter called attention to Manheimer’s recent State of the City address, in which she referred to the $74 million bond package as “a catalyst for equity.” What does that mean?” the reporter asked.

“That’s a good question,” Manheimer replied. “I thought about that a lot. Our [$17 million] parks and rec bond package does call for improvement in several areas of the city that are historically African American. I think that would be very much an equity issue.” She did not mention how the other bonds might contribute to a more equitable city.

The mayor confirmed that, within each given bond category, it is “technically possible” to repurpose monies for projects other than the ones officially listed in the bond questions, but said, “A lot of people are concerned about this and I wish there were some way that we didn’t have that flexibility.” She said she stands by her position that the bond moneys should go directly to the specified projects, with no substitutions.

“Well, are you going to be mayor for the next seven years?” asked former mayor Ken Michalove, who was in the audience. “Because on any given day, if you count noses [on city council] all it takes is four people to change that.

“The city desperately needs infrastructure improvements,” Michalove read from a prepared statement, “however, those needs have been supplanted by the City Council’s excessive funding of … greenways; the river arts district, and the Asheville Art Museum.”

Councils and managers change,” Michalove said. He asked the audience “Are you willing to write a blank check to people you don’t know, that have the types of special interests that are currently funded or in the future the latest social fad or need?”

Meanwhile, Michalove said, “There has been a proliferation of new city ‘user fees’ for service like trash and storm water. These are taxes! And there will likely be more of those so-called user fees imagined by city council members as they try to tell the public they are not raising taxes.”

Setting aside his statement, Michalove concluded, “I’m sorry to be blunt, but I don’t trust you, or this council, or this administration.”

And then came Manheimer’s familiar nemesis, former Vice Mayor Chris Peterson.

“I’m gonna tell you stuff you may not like,” said Peterson, who in May was ordered out of a city council meeting by Manheimer. “Take your transportation. Your transit system is losing four to five million a year. I don’t care if they do pass this [the transportation bond], it’s not going to change under this present council. They’re blowing money. They think every day is Christmas.

“They’re going to revalue your property,” Peterson told attendees. “You’re going to pay more no matter what. And look at your city water bill. It looks like a mortgage payment now. I called [City Manager] Gary Jackson up and told him – wait, let me just finish,” he said as Manheimer made to leave.

“Is there any security here?” the mayor asked a staffer, looking around.

“Just let me finish,” Peterson repeated. “I said, ‘Gary, you’re $7 million in the hole right now. What are you gonna do?’ He said, ‘We’re not gonna raise taxes.’ And he didn’t. He raised fees and charges. That’s what they call them. Not taxes. They’re very good,” Peterson said. He left of his own volition.

The mayor’s other bond presentations are as follows:

•Central Asheville – 7 p.m. Oct 12 at the City of Asheville Public Works Building, 161 S. Charlotte St.